US-based challenger bank Chime Financial has selected Goldman Sachs Group to assist it with its initial public offering (IPO), Reuters reported citing sources. 

The digital banking provider could seek a valuation of nearly $40bn through the IPO in New York, the sources added.

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This news comes a few months after Chime’s $750m Series G funding round that valued it at $25bn.

“While Chime intends to be a publicly listed company someday, we have not made any decisions on underwriters and have no immediate plans for an IPO,” Chime’s spokesperson was quoted as saying by the news agency.

In recent weeks, the digital bank has been in talks with investment banks, the sources said adding that more banks will be brought in as underwriters for the IPO.

The timing and size of the IPO will depend on market conditions, which could come as early as spring, they added.

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Former Visa executive Chris Britt and Comcast Corp veteran Ryan King founded Chime in 2012, which offers fee-free mobile banking services through its app.

The challenger bank partners with physical lenders to offer services such as checking accounts and free overdrafts that have contributed to its growth as a bank, which was valued at $1.5bn three years ago.

Its revenue comes from the fee it charges from payment processors such as Visa whenever a customer uses a Chime debit or credit card.

In June 2021, eMarketer projected that Chime’s US user base would be 13.1 million by the end of 2021, though the digital bank itself did not divulge the size of its customer base.